Turning Customer Data
into Profits

with a Spreadsheet

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8 Tips for
Customer-Focused
Marketing Promotions

Jim's Intro: These are patterns of behavior seen repeatedly in
customer marketing, and can be used to increase profits.

1. Always advertise where the behavior you want to create is. If you
want clicks, advertise where people are clicking. If you want buyers,
advertise where people buy.

2. The media and method used to acquire a customer has a
very large effect on the future value of the customer. Customers from
search engines will have different buying patterns and future values than customers from banner ads. Measure these differences.

3. 50 percent to 60 percent of your customer
base will be one-time buyers or visitors. Accept it. You'll waste a ton of money trying to change it, and it's not going to change.
One-time
buyers who bought multiple items on the first purchase are a
possible exception. Try them first. Then try one-time buyers with the
highest order value. If these don't bite, none of them
will.

4. The only chance you have at getting a first-time buyer to purchase
again is to contact them quickly after the first purchase.

5. One-time buyers who return their only purchase CAN be better marketing targets than those who don't
return their purchase - IF the customer service experience they
have in dealing with the return is outstanding.

6. Customers on average will buy down in price over their
LifeCycle;
unless you take specific action to influence this behavior, the average order price falls over time. For this
reason, buyers who "go cheap" on the first purchase
usually have lousy future value.

7. One $50 1st purchase customer is worth more than two $25
1st purchase customers. See #6 above for the reason.

8. Resend a promotion to the same people. You can often
get 50% of the first response rate if the original promotion was
a targeted one. It's OK to send exactly the same promotion, can
be better to send slightly different copy, like "2nd
chance!"
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This ends the tutorial, which is based on the concepts outlined in my
book:Drilling Down - Turning Customer Data into Profits with
A Spreadsheet.

Congratulations! You know the techniques used to predict the future value of customer
groups based on their Recency. I encourage you to do a simple Recency
study on any customer group you have the data for. You will be amazed at
what you see, I guarantee it. You will find out at least 30% of your
"best customers" are no longer customers, because it has been a long
time since they have interacted at all with you. You have to catch these
people with some kind of "early warning system"
before they defect, because once it happens, they're gone and are very difficult
to get back.

If you don't know you have a problem, you can't begin to fix it, and that's
exactly what these Recency studies are intended to do - identify customer future
value problems and allow you to track them.

If you want to learn how to profitably address these
problems, identify best
customers who are about to leave you, maximize promotion response while
minimizing discounts, and design profitable best customer promotions, my book tells you how to do it,
step by step, just like this tutorial.

Look, I can't just give the information in the book away. I make my
living teaching companies and service agencies these methods, and I have
responsibilities to take care of. But there's a lot of smaller businesses
out there who need this information to get profitable, and that is why I wrote
the book.

I think I've been pretty fair here on the site - I've given away a ton of
valuable information on one aspect of the Drilling Down approach - comparing the
future value of customer groups so you can make the right choices in
marketing and site design. You have seen how I write, the teaching style,
and the kinds of examples you will find in the book. You can go ahead and
test this information with your own data - I've explained to you how to do
it.

How many other authors are confident enough to give you this kind of
information and methods you can use to "try before you buy"? How
many marketing books have you bought that promise "how to"
information, but give you only theory? Have you read the customer testimonials
on my book?

If you want to learn the rest of the story - how to create likelihood to
respond and future value scores for individual customers, and how to use
these scores to make more money marketing to customers,
you'll have to get the book. Or book some
time with me.

Hey, do me a favor, will you? If you thought the tutorial was valuable,
please send a link to somebody who needs this info to start making more money
with customer marketing. The URL for the start of the tutorial is: